Many financial firms find themselves at a crossroads, where they must define their goals—whether it’s expanding their assets under management (AUM) or growing their internal workforce. Fortunately, technology stands as a valuable ally in achieving both objectives. It’s a truth that couldn’t be more pertinent for Registered Investment Advisors (RIAs) and wealth management firms, as the growth strategy that served them well yesterday may not suffice for tomorrow’s challenges.
In a dynamic landscape influenced by market fluctuations, evolving consumer preferences, and the ever-increasing digitalization of financial services, RIAs are compelled to adapt their business approaches to stay relevant and competitive. The imperative for growth has never been more pronounced. To remain on the cutting edge, firms must align with these shifts or risk trailing behind.
It’s essential to recognize that growth is not merely a standalone measure of success; it’s an indicator that benefits both clients and the firm itself. Given the interdependence of client and firm success, continued growth carries not only financial significance but also a moral imperative. Growth in 2023 can manifest in various ways, whether by expanding your portfolio of clients or bolstering your internal team.
If your firm has set its sights on growth in the upcoming year, read on as we dissect three of the foremost challenges facing RIAs today and offer valuable insights on how to surmount them.
1) Losing Passion Leads to Poor Recruiting & Retention
First and foremost, growth is only possible with the right team and people behind your business. Take those away, and you’ll be hard-pressed to achieve much. Unfortunately, beyond the bear market or even a looming recession, one of the biggest obstacles facing RIA firms today is exactly that: retention and recruiting.
Indeed, many firms report that while an open position in the past may have had as many as 60 applicants, today, they’re hard-pressed to have even three applicants for a role. Not to mention paying above-market salaries for highly competitive roles, which can increase business expenses over time.
Kevin Beard of Atria Wealth Solutions offers this advice: Make 2023 the year of connections and connectivity for your clients and employees. The best asset you can exercise is finding your passion for your business and sharing that passion with those around you. Consider revamping your branding, value statement, or benefits. Oftentimes, this will contribute to more applicants in line with your vision.
“If you’re not growing, you’ve fallen into a rut where you’ve lost the passion you have for your business,” Beard said. “Part of growth is staying ahead of the competition, but also not losing your passion.”
Firms that want to grow must learn how to attract and retain employees. Beyond salaries and open positions, candidates will be drawn to firms that differentiate themselves with an attractive virtual/physical office environment, great compensation and benefits, increased flexibility, and a healthy work/life balance. And don’t forget, opportunities for advancement.
2) Define Your Growth Strategy to Incentivize the Right Activities & Measurement
The most important component of a growth strategy is to have one. Jeff Vivacqua, Cambridge Investment Research Inc.’s President of Growth and Development, puts it this way: A growth plan you can think of in five minutes probably isn’t a very good plan.
The answer to real growth isn’t generic statements like “more marketing,” “more retention,” or “more clients!” Rather, true growth requires drawing up a strategy you can measure with specific improvement metrics.
There are three main growth areas for advisement firms:
- Organic Growth
All of these will work to improve your firm’s growth, but it can be difficult to direct your efforts unless you know which specific area you want to focus on. Vivacqua recommends this 4-step process to decide what growth strategy is right for your firm:
- What is my growth plan now?
- How do I want to grow in the future?
- What are the right activities I need to implement to get it done?
- What are the right metrics to measure success by?
Once you know the answer to those questions, you can decide which growth strategy makes sense for your business, goals, and budget. After all, RIAs can only do so much. Figuring out where to spend your time and money for the most efficient marketing dollar is the secret to continued growth, no matter the climate.
3) Use Technology to Improve Processes & Act on Core Values
Finally, growth can’t be achieved just by adding a new technology tool to improve efficiency for the back office and clients. Rather, as more firms become digitized, a key differentiator for firms will be the quality of their technical processes and personal touches with clients.
As your firm becomes more adept at technology, adoption and effective execution means building methodical processes for implementation, usage, and application by clients and employees. It’s not enough to have enabling tech to grow; you need to have processes that will make the tech work for your organization, your people, and your clients.
In the fast-paced world of financial services, the key to achieving your goals while maintaining peak efficiency is to leverage technology as a strategic asset, and PreciseFP is your game-changing ally. By integrating PreciseFP into your tech stack, you can bid farewell to the drudgery of manual data entry, unlocking thousands of valuable administrative hours. The result? A workforce that feels empowered and supported, ready to provide an unparalleled level of customer service that leaves your clients not just satisfied, but truly impressed. With PreciseFP, you’re not just streamlining your processes; you’re supercharging your entire operation for success in the digital age. Elevate your financial practice to new heights by embracing the future of data management with PreciseFP.